Wealth Gap Yawns and So Do Media

Wealth Gap Yawns and So Do Media

Earmarks, Campaign Contributions, and Lobbying Expenditures

It should come as no surprise that financing politicians pays back hugely and the wealth gap between the political class and the apolitical class is correspondingly huge — at least until society finally geonomizes. We trim, blend, and append two 2010 articles from (1) Center for Responsive Politics and Taxpayers for Common Sense on their annual report, June 3, by Dave Levinthal and Steve Ellis; and (2) TruthOut, June 4 on the wealth gap by Julie Hollar.

by Dave Levinthal & Steve Ellis and by Julie Hollar

Earmarks, Campaign Contributions, and Lobbying Expenditures

Two of Washington DC’s most reliable and respected nonpartisan watchdogs have once again joined forces, updating their one-of-a-kind, comprehensive database that links campaign contributions with earmarks of members of Congress.

“This unique database helps people investigate whether their elected officials might be doing special favors for special interests,” said Sheila Krumholz, the executive director of the Center for Responsive Politics.

“This tool shines a light on the current system where millions of dollars in campaign contributions can turn into billions of earmarked tax dollars,” said Ryan Alexander, president of Taxpayers for Common Sense.

Members of Congress use “earmarks” to provide federal funding to companies, projects, groups and organizations, often in their district. The practice has come under intense criticism this year, with congressional Democrats banning earmark requests benefiting for-profit entities for fiscal year 2011 and congressional Republicans pushing their caucus to abstain from requesting earmarks across-the-board.

Last fiscal year, members of Congress obtained nearly 9,500 spending provisions — worth over $15.9 billion — for organizations that spent $269 million on lobbying, the Center for Responsive Politics and Taxpayers for Common Sense found.

These members of Congress also accepted more than $2.3 million from the political action committees and employees of the intended earmark beneficiaries — of the $22.4 million these organizations donated to all federal candidates and parties, the Center for Responsive Politics and Taxpayers for Common Sense found.

User-friendly databases showcase the data in a manner that is sortable in a variety of ways, including by House and Senate members, by recipients that lobby, by recipients with political action committees, by state and by legislation.

The addition of fiscal year 2010 information augments data from fiscal years 2008 and 2009, which the watchdog groups released last year.

JJS: If you cant afford to donate, watch out!

Wealth Gap Yawns and So Do Media

The Insight Center for Community Economic Development released a report about the wealth gap for women of color: Single black women have a median wealth of $100 and Hispanic women of $120 — dramatically lower than white men ($43,800), white women ($41,500) or black men ($7,900).

The median wealth for single white women in their prime working years, age 3649, is 61% of the wealth of their male counterparts, who own $70,030. The corresponding ratio between women and men of color is nearly off the charts, at just 0.05% — $5 versus $11,000. Almost half of single black and Hispanic women have zero or negative wealth. (Data was unavailable for Asian-American and Native American women.)

A racial wealth gap had been well established, as had a gender wealth gap. But the intersection of the two had never been measured. The numbers in Lifting as We Climb: Women of Color, Wealth and Americas Future demonstrate the compounding effects on women of color.

While income is the most common measurement for inequality, wealth — an individuals assets minus their debts — reveals even greater disparities in the United States. While the top 1% received 21% of the income in 2006, it held over 34% of the wealth. And racial disparities are drastically greater in terms of wealth than in terms of income.

Not only does wealth have a lot to do with the ability to retire or support yourself in old age, people of all ages are much more likely to lose their homes or otherwise find themselves unable to support themselves or their families without savings or assets to fall back on during economic hardship. And, indeed, women of color have had the highest foreclosure rates of any group during the current recession — both as a result of their lack of wealth and their being targeted for subprime mortgages, regardless of their income level.

Research has found that family wealth is the biggest predictor of the future economic status of a child, giving lie to the old American bootstraps mythology.

Syndicated columnist Bonnie Erbe (Scripps Howard, 3/17/10) wrote, The best thing women can do to build wealth is to start businesses, as opposed to getting caught in time-consuming and income-limiting salaried positions.

Erbe added that the report fails to take note of how women got themselves into the predicament where they currently find themselves, pointing a finger at women who bear children out of wedlock before they have completed their own education and thereby consign those children to a cycle of poverty.

Framing the issue as something that poor women have brought upon themselves masks the structural barriers and discrimination that need to be addressed in order to bring about real change.

JJS: Let us do address structural barriers and at the root level. Tinkering with surface issues wont do the job. Let us gather up the commonwealth and share it. Lets not tax jobs or investment or sales or buildings then turn around and fund corporate welfare, the return from campaign contributions. Not only would this geonomic policy close the wealth gap straight away, itd also generate more jobs and create a climate in which poor women could indeed launch new enterprises.

Our editor published The Geonomist which won a Californian GreenLight Award, has appeared in both the popular press (e.g., TruthOut) and academic journals (e.g., USC’s Planning and Markets), been interviewed on radio and TV, lobbied officials, testified before the Russian Duma, conducted research (e.g., for Portland’s mass transit agency), and recruited activists and academics to the Forum on Geonomics. A member of the International Society for Ecological Economics and of Mensa, he lives in America’s Pacific Northwest.

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Arts & Letters

Geonomics is …

of interest to Dave Lakhani, President Bold Approach (Mar 8) and Matt Ozga (Jan 29): “I write for the Washington Square News, the student run newspaper out of New York University. Geonomics seems like it has great significance, especially in this area. When was geonomics developed, and by whom?”
About 1982 I began. Two years later, Chilean Dr Manfred Max-Neef offered the term geonomics for Earth-friendly economics. In the mid-80s, a millionaire founded a Geonomics Institute on Middlebury College campus in Vermont re global trade. In the 1990s, CNBC cablecast a show, Geonomics, on world trade as it benefits world traders. My version of geonomics draws heavily from the American Henry George who wrote Progress & Poverty (1879) and won the mayoralty of New York but was denied his victory by Tammany Hall (1886). He in turn got lots from Brits David Ricardo, Adam Smith, and the French physiocrats of the 1700s. My version differs by focusing not on taxation but on the flow of rents for sites, resources, sinks, and government-granted privileges. Forgoing these trillions, we instead tax and subsidize, making waste cheap and sustainability expensive. To quit distorting price, replace taxes with “land dues” and replace subsidies with a Citizens Dividend.
Matt: “This idea of sharing rents sounds, if not explicitly socialist, at least at odds with some capitalist values (only the strong survive & prosper, etc). Is it fair to say that geonomics has some basis in socialist theory?”
A closer descriptor would be Christian. Beyond ethics into praxis, Alaska shares oil rent with residents, and they’re more libertarian than socialist. While individuals provide labor and capital, no one provides land while society generates its value. Rent is not private property but public property. Sharing Rent is predistribution, sharing it before an elite or state has a chance to get and misspend it, like a public REIT (Real Estate Investment Trust) paying dividends to its stakeholders – a perfectly capitalist model. What we should leave untaxed are our sales, salaries, and structures, things we do produce.

an answer for Jonathan of the Green Party (Nov 7): “What does ‘share our surplus’ mean?”Our surplus is the values that society generates synergistically. It’s the money we spend on the nature we use: on land sites, natural resources, EM spectrum, ecosystem services (assimilating pollutants). It’s also the money we pay to holders of government-granted privileges like corporate charters. We could share it by paying for the nature we use and privileges we hold to the public treasury then getting back a fair share of the recovered revenue. Used to be, owners did owe rent (“own” and “owe” used to be one word). And presently, some lucky residents do get back periodic dividends: Alaska’s oil dividend and Aspen Colorado’s housing assistance. Doing that, instead of subsidizing bads while taxing goods, is the essence of geonomics.
Jonathan: “Is local currency what you mean?”
Editor: It’s not. Community currency is a good reform, but every good reform pushes up site values. That makes land an even more tempting object of speculation. Now, any good will eventually do bad by widening the income gap – until you share land values.

a study of a phenomenon David Ricardo noted going on two centuries ago. When wine grapes rise to $10,000 a ton from the very best land (last year, cabernet sauvignon commanded an average of $4,021 a ton in the Napa Valley), then vineyard prices soar from $18,000 an acre in the 1980′s to $100,000 an acre five years ago and now for a top pedigree up to $300,000 an acre (The New York Times, April 9, via Wyn Achenbaum). Pricey land does not make wine pricey; spendy wine makes land spendy. While vintners make their wine tasty, nature and society in general – not any lone owner – make land desireable. Steve Kerch of CBS’s MarketWatch (April 5) notes that much of what a home sells for on the open market is a reflection of intangible factors such as what school district the house sits in. The price the builder has to pay for the land also tends to be driven by the same intangibles. Because the value of land comes from society, and because one’s use excludes the rest of society, each user owes all others compensation, and is owed compensation by everyone else. Sharing land’s value, instead of taxing one’s efforts, is the policy of geonomics.

an alternative to conventional land trusts. Just as it seems some functions should not be left to the market – private courts and cops invite corruption (while private mediation is fine) – just so some land should not be left in the market. That said, sacred sites do not make much of a model for treating the vast acreage of land that we need to use. So the usual trust model, which is anti-use and counter-market, can not apply where it’s needed most. Trust proponents worry about ownership and control – two very human ambitions – but they’re not central. Supposedly, we the people own millions acres – acres that private corporations treat as private fiefdoms – and conversely, the Nature Conservancy owns wilderness the public can some places use as parks. So, the issue is not who owns but who gets the rent – ideally, all of us.

more transformation than reform; it’s a step ahead. Harvard economics students this year did petition to change the curriculum, in the wake of the English who caught the dissension from across The Channel. French reformers, who fault conventional economics for conjuring mathematical models of little empirical relevance and being closed to critical and reflective thought, reject this “autism” – or detachment from reality – and dub their offering “post-autistic economics”. Not a bad name, but again, academics define themselves by what they’re not, not by what they are, unlike geonomists. We track rent – the money we spend on the nature we use – and watch it pull all the other economic indicators in its wake. We see economies as part and parcel of the ecosystem, similarly following natural patterns and able to self-regulate more so than allowed, once we quit distorting prices. To align people and planet, we’d replace taxes and subsidies with recovering and sharing rents.

not a panacea, but like John Muir said, “pull on any one thing, and find it connected to everything else.” Recall last month’s earthquake in El Salvador. We felt it and its formidable after-shocks in Nicaragua. Immediately afterwards, my host nation, one of the poorest in the Western Hemisphere, sent aid to its Central American neighbor. The Nica newspapers carried photos of the devastation. They showed that the cliff sides that crumbled had had homes built on them while the cliffs left pristine withstood the shock. Could monopoly of good, safe, flat land be pushing people to build on risky, unstable cliffs? If so, that’s just one more good reason to break up land monopoly. What works to break up land monopoly, history shows, is for society to collect the annual rental value of the underlying sites and resources. That’d spur owners to use level land efficiently, so no one would be excluded, forced to resort to cliffs. To prevent another man-induced landslide is yet another reason to spread geonomics.

close to the policy of the Garden Cities in England. Founded by Ebenezer Howard over a century ago, residents own the land in common and run the town as a business. Letchworth, the oldest of the model towns, serves residents grandly from bucketfuls of collected land rent (as does the Canadian Province of Alberta from oil royalty). A geonomic town would pay the rent to residents, letting them freely choose personalized services, and also ax taxes. Both geonomics and Howard were inspired by American proto-geonomist Henry George. The movement launched by Howard today in the UK advances the shift of taxes from buildings to locations. A recent report from the Town and Country Planning Association proposes this Property Tax Shift and their journal published research in the potential of land value taxation by Tony Vickers (Vol. 69, Part 5, 2000). (Thanks to James Robertson)

an answer for Jonathan of the Green Party (Nov 7): “What does ‘share our surplus’ mean?”
Our surplus is the values that society generates synergistically. It’s the money we spend on the nature we use: on land sites, natural resources, EM spectrum, ecosystem services (assimilating pollutants). It’s also the money we pay to holders of government-granted privileges like corporate charters. We could share it by paying for the nature we use and privileges we hold to the public treasury then getting back a fair share of the recovered revenue. Used to be, owners did owe rent (“own” and “owe” used to be one word). And presently, some lucky residents do get back periodic dividends: Alaska’s oil dividend and Aspen Colorado’s housing assistance. Doing that, instead of subsidizing bads while taxing goods, is the essence of geonomics.
Jonathan: “Is local currency what you mean?”Editor: It’s not. Community currency is a good reform, but every good reform pushes up site values. That makes land an even more tempting object of speculation. Now, any good will eventually do bad by widening the income gap – until you share land values.

in part the Great Green Tax Shift maxed out. Economically, taxing pollution and depletion does reduce pollutants and extracts – and thus the tax base; plus such taxes are regressive, requiring a safety net. On the other hand, collecting site rent is progressive and generates a revenue surplus payable as a dividend to residents, which can serve as the safety net. Environmentally, taxes on waste and extraction do not drive efficient use of land, as does getting site rent.

a POV that Spain’s president might try. A few blocks from my room in Madrid at a book fair to promote literacy, Sr Zapatero, while giving autographs and high fives to kids, said books are very expensive and he’d see about getting the value added tax on them cut down to zero. (El Pais, June 4; see, politicians can grasp geo-logic.) But why do we raise the cost of any useful product? Why not tax useless products? Even more basic: is being better than a costly tax good enough? Our favorite replacement for any tax is no tax: instead, run government like a business and charge full market value for the permits it issues, such as everything from corporate charters to emission allowances to resource leases. These pieces of paper are immensely valuable, yet now our steward, the state, gives them away for nearly free, absolutely free in some cases. Government is sitting on its own assets and needs merely to cash in by doing what any rational entity in the economy does – negotiate the best deal. Then with this profit, rather than fund more waste, pay the stakeholders, we citizenry, a dividend. Thereby geonomics gets rid of two huge problems. It replaces taxes with full-value fees and replaces subsidies for special interests with a Citizens Dividend for people in general. Neither left nor right, this reform is what both nature lovers and liberty lovers need to promote, right now.